2019 -- S 0825

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LC001872

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- DEFERRED COMPENSATION

PLANS

     

     Introduced By: Senators Murray, Lawson, Valverde, Conley, and Felag

     Date Introduced: April 30, 2019

     Referred To: Senate Finance

     (Department of Administration)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 36-13-6 of the General Laws in Chapter 36-13 entitled "Deferred

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Compensation Plans" is hereby amended to read as follows:

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     36-13-6. Other benefits unaffected.

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     The deferred compensation program established by this chapter shall exist and serve in

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addition to retirement, pension, or benefit systems established by the state, county, city, town, or

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other political subdivision, and no deferral of income under the deferred compensation program

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shall affect a reduction of any retirement, pension, or other benefit provided by law. However,

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any sum deferred under the deferred compensation program shall not be subject to taxation until

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distribution is actually made to the employee.

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     SECTION 2. Chapter 36-13 of the General Laws entitled "Deferred Compensation Plans"

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is hereby amended by adding thereto the following section:

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     36-13-6.1. Sums subject to taxation.

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     (a) Except as designated in this section, any sum deferred under the deferred

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compensation program shall not be subject to taxation until distribution is actually made to the

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employee.

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     (b) Subsection (a) of this section shall not apply where the deferred compensation

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program includes a qualified Roth contribution program and the sums have been deferred as a

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designated Roth contribution. Where the employee has elected that sums be deferred as a

 

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designated Roth contribution, the sums shall be deferred post tax.

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     (c) For the purposes of this section, the term “qualified Roth contribution program”

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means a program under which an employee may elect to make designated Roth contributions in

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lieu of all or a portion of elective deferrals the employee is otherwise eligible to make under the

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deferred compensation program. A program shall not be treated as a qualified Roth contribution

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program unless the deferred compensation program:

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     (1) Establishes separate accounts for the designated Roth contributions of each employee

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and any earnings properly allocable to the contributions; and

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     (2) Maintains separate recordkeeping with respect to each account.

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     (d) For the purposes of this section, the term “designated Roth contribution” means any

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elective deferral which is excludable from gross income of an employee with regard to subsection

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(a) of this section and the employee designates as not being so excludable.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- DEFERRED COMPENSATION

PLANS

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     This act would allow state employees the ability to make an after tax contribution to a

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qualified Roth contribution program as a part of a deferred compensation plan.

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     This act would take effect upon passage.

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